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Home Loan

Everything You Need To Know About Rural Housing Loan

Everyone wants their home to call their own. It is challenging for people from remote locations to obtain home loans with reasonable housing loan interest rates and flexible repayment terms. Rural home loans come in handy in this situation. They can use rural home loans to buy a house in the country, whether it’s brand new, already built, under construction, or just a plot of land. This rural housing loan helps realise the government of India’s goal of “Affordable Housing for All.” It provides unique advantages like lenient eligibility requirements, almost no processing costs, and minimum documentation requirements. Housing loan interest rates in rural areas range from 6.90% to 14% yearly. The rural housing loan’s maximum repayment period is 30 years, and loan amounts can range from 2 lakh to 1 crore rupees. Let’s look at the specifics of rural home loans right now. [B-01] Features of Rural Home Loans The processing charge for the loan is either non-existent or very low. Some financial organisations include a free insurance policy with this loan. It has a longer and more flexible repayment period. It comes with a customised documentation process. In many cases, there is a door to door lending servicing also. No early payment fee. Tenure and Amount of Rural Housing Loans Possibilities for flexible terms of 3 to 30 years. Depending on income, ability to repay, and project cost, loans might range in size from Rs. 2 lakhs to Rs. 75 lakhs. Eligibility Criteria for Rural Housing Loans People must fulfil the following requirements to be eligible for rural housing loans: The applicant must be of Indian descent. The applicant must be at least 21 years old. There must be a consistent and steady source of income. Anyone with a reliable source of income and a high credit rating can apply, whether alone or jointly with family members like a parent, spouse, or child. Agriculturists, business owners, independent contractors, salaried employees, and professionals are also eligible. Documents Required for Rural Housing Loans Identity Proof – Any one document out of Passport, PAN Card, Driving License, Voter’s ID Card, Aadhaar Card, Ration card Address Proof – Any one document out of Passport, Aadhaar card, Voter ID, Driving licence, Property documents, Ration card, Lease/rent agreement and last three months’ utility bills Income Proof – Any one document out of Income tax returns, last three months’ salary slips, Form 16 and Bank statements of the previous six months. Note: The types of documents needed will depend on the financial institution. Benefits of Rural Housing Loans Low processing costs: In comparison to other loans, processing costs for rural housing loans are either nonexistent or extremely low. Longer repayment terms: There are options for terms of up to 30 years, and farmers are given a particular discount. Low-interest rates: The range of enticing housing loan interest rates is 6.90% to 14% annually. Availability: Everyone can get loans if they want to buy a new, already-built, or used residential property in their village, including paid and self-employed people. Zero prepayment fees: Rural housing loans are not subject to prepayment fees. No unforeseen fees: All fees associated with the loan are disclosed at the time of loan application. Moratorium period: For these loans, certain banks provide a moratorium period that may last up to 18 months. Insurance coverage: Some banks provide free insurance coverage for rural housing loans. Door-to-door service: For rural house loans, some banks provide a door-to-door service option and personally guide the person through the entire process. Special consideration for farmers: There is no mandatory requirement for farmers applying for home loans to submit Income Tax Returns (ITR). Drawbacks of Rural Home Loans Increase of the property cost – When one avails of a home loan, the total cost of the property hikes as there is a housing loan interest component that adds up to the principal amount borrowed. Long-term commitment – A home loan goes on for many years, on average, 10-12 years. Any unforeseen situations impact the ability of a person to pay the EMIs. Opportunity cost – Opportunity cost, as used in business economics, refers to a profit, benefit, or value that must be forgone to obtain or achieve anything else. When compared to other asset classes of investing, real estate has provided substantially lower returns over the past few years. The rural housing loan is viewed as a missed opportunity because of its long term. Security for Rural Home Loans Primary: Registered mortgage of the house/plot or any other tangible security including agricultural land Collateral: Banks cannot give a loan against agricultural land under SARFAESI Act. Moreover, a ‘farmhouse’, is exempted under Sec.60 of CPC. Hence, the bank must explore other possibilities for obtaining collateral security, wherever available. Repayment of Rural Housing Loans Home Loans should be repaid over <30 years in equated monthly/quarterly/half-yearly/yearly instalments. The period of repayment and the amount of instalment should be decided on a case-to-case basis or a realistic basis. The repayment could be made as per the instructions and options available with the bank. Frequently Asked Questions 1. Who is considered to be a weaker section? The National Housing Bank’s (NHB) Circular of Refinance Schemes for Scheduled Commercial Banks, which went into effect in 2013, explains the weaker sections and rural areas. 2. which areas are considered to be rural? A “Rural Area” is any area that is a part of a village or small town with fewer than 50,000 people, as determined by the 1991 Census. 3. Can applicants who live in rural areas obtain a loan to build or modify a home? Yes, clients may apply for a loan to build, buy, or renovate a home in a rural region. [B-02] Wrapping up In the end, deciding to take out a home loan is a personal decision based on various variables, such as one’s financial capabilities. One should exercise prudence when making any financial decision. Read more about rural housing loans only on Piramal finance. Piramal Finance offers Home Loans, Secured & Unsecured Business Loans, Corporate Loans and various other loans, with lower EMIs at great interest rates
08-11-2023
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Other

Why should one go for ETFs?

Everyone has become aware they need multiple income sources to become financially independent. You must start saving money and using it to make more money. If you are making long-term financial plans, the two most crucial elements to consider are saving and investing. You should save your money so you can access it whenever needed. If you start investing early and stay consistent, your money can grow considerably with the power of compounding. But where should you invest your money? Smart investing may allow your money to overtake inflation and grow in value. Investing in some of the best ETF funds has good potential because of the power of compounding and the lower risk involved. Everyone has basic knowledge of ELSS funds. It is a trust that collects funds from a large number of investors and invests all of them in equities, bonds, etc. ETFs are similar to mutual funds in many ways, but unlike mutual funds, the pool of money is not managed by a professional fund manager, and the money is invested directly into a specific index fund by the company. In this article, we will discuss what ETFs are, what some of the best ETF funds are, how they differ from mutual funds, and why you should invest in them. [B-01] What are ETFs? ETFs are groups of securities that invest in certain index funds. ETFs can only be traded like stocks on an exchange, such as the NSE and BSE in India. Unlike traditional open-end mutual funds, which invest a total pool of money at the end of the day at a fixed NAV, ETFs can be bought and sold at any time during the trading day. ETFs can be active funds that try to outperform the market, but usually they are index funds, and their performance is predictable over time. The best ETF fund would give you returns that are at least equal to those of an index like the Nifty or the Sensex, if not more. An important characteristic is that if a company has just launched an ETF and you subscribe to that ETF fund, you are buying directly from the company. You can sell fund units after they get listed on the stock exchange. Differences between ETFs and Index Funds Before you choose the best ETF fund that suits your needs, you should have an understanding of ETFs with the help of the following differences between ETF and index funds: Traded on stock exchanges (NSE and BSE) These funds of securities get traded on the leading stock exchange like shares. In India, they are traded on the BSE and the NSE. ETFs are like stocks in that they are listed on the exchanges and actively traded, unlike index funds. Buying and Selling In the case of ELSS funds, you can instantly buy them to get fund units; however, in the case of ETFs, you can only buy a share if someone else is selling it. Usually, the best ETF fund has a large trading volume, so you will not face many problems finding buyers or sellers for the ETF. ETF Taxation We are buying exchange-traded funds from exchanges. They are known as NSE and BSE in India. So the Securities Transaction Tax (STT) is applied. For example, when you buy an equity share in a company and the contract is settled by the actual delivery or transfer of the shares or units, you have to pay a 1% tax. If you are using a DEMAT account, then debit charges are applied as well. Fixed Fund Size For ELSS mutual funds, the fund size may vary with the amount of investment, but that is not the case with ETFs. The fund size of ETFs is fixed from the start and does not expand with increasing investment amounts. Expenses The majority of ETFs have lower annual expenses than index mutual funds. However, some of the best ETF funds charge more if they are actively managed. To buy and sell ETF units, you have to pay a brokerage fee, just like with stocks. This can be a big problem for people who trade a lot or invest large amounts of money often. ETFs Vs. Open-Ended Funds Vs. Close-ended Funds ParameterClosed-Ended FundExchange Traded FundOpen Ended FundLiquidity ProviderStock MarketStock Market / Fund itselfFund itselfNAVDailyReal-TimeDailySale PriceSignificant Premium / Discount to NAVVery close to the actual NAV of the SchemeAt NAV plus load, if anyFund SizeFixedFlexibleFlexiblePortfolio DisclosureMonthlyDaily/Real-timeMonthlyAvailabilityThrough Exchange where listedThrough Exchange where listed / Fund itself.Fund itselfIntra-Day TradingExpensivePossible at a low costNot possibleUses–Equitising Cash, Hedging, ArbitrageEquitising cash Advantages of EFTs They have the following advantages over traditional open-ended index funds: Some of the top ETF funds provide intra-day purchases and sell on the exchange, allowing you to capitalise on the current price. Most ETFs have lower annual expenses than index mutual funds. The costs of distribution are much lower, which are passed on to the investor. And the reach is greater as well because ETFs are listed on an exchange. ETFs shield long-term investors from short-term traders. This is because the fund incurs no additional transaction fees when purchasing and selling index shares as a result of frequent subscriptions and redemptions. The best ETF fund will provide investors with a fund that closely monitors the performance of an index throughout the day and allows them to purchase and sell at any time. [B-02] The bottom line We hope now you have a good understanding of Exchange Traded Funds and how to choose the best ETF fund for yourself. ETFs are gaining popularity among passive investors, short-term traders, and investors seeking active investing options. India’s ETF market appears to be in its early stages compared to other countries. The growing number of Demat accounts could bolster the positive trend in ETF investments. It would be wise to invest only in the best ETF funds that are established and have a good track record. Because ETFs offer intraday trading, which traditional funds do not, and do not impose heavy taxation on purchases, they should be considered long-term investing resources. You can easily start investing in them. If you need help with finances and choosing the best ETF funds to invest in, you can always take the help of experts such as Piramal Finance.
08-11-2023
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Investment

Avoid These Common Mistakes When Investing in SIP

Everyone desires a financially stable and opulent lifestyle. For that, a proper monetary plan is necessary. A Systematic Investment Plan is undoubtedly one of the best approaches toward a financial foundation. SIP is a convenient and straightforward route to generate a respectable amount of revenue. The postulate of this plan is for you to keep investing regularly with proper regulation. In due course, this will lead to the accumulation of wealth systematically. Suppose you want to invest Rs. 6900 per month for six years. With your mutual fund, you can establish a SIP and regulate the contributions in the given period. There is also a choice to increase or decrease the posting frequency. SIP funds generally sanction weekly, monthly, quarterly and semi-annual investments. However, investors might be occasionally unsuccessful in augmenting their SIP returns because of unfortunate mistakes in the expenditure. We shall discuss the common mistakes made while investing in SIP mutual funds. [B-01] Typical Mistakes and How to Avoid them: For the sake of obtaining the maximum returns through SIP mutual funds, caution is necessary. The slightest of mistakes can hamper the outcome of the investment. The following are the most common mistakes investors should avoid during the process. Selecting the incorrect plan for the objective- The high returns of some plans often tempt some investors. This leads them to choose schemes that may not fit their goals. This can prove to be quite unfortunate. Soon enough, when the returns inevitably do not meet their needs, they develop a continual market fear and unstable portfolio. To choose the best strategy, consider your unique financial goal, time horizon, and risk tolerance. Keeping the SIP mutual fund Investment low SIPs are popular among investors, but relatively few consider raising their investments even when their income and excess rise annually. You start to make more money as your profession develops. Additionally, as your income rises, your lifestyle also gets better. However, if you merely raise your expenses without raising your savings, it will not benefit you in the long run. Although you can invest with as little as Rs.500 in most mutual fund plans, sticking with that amount for the required tenure may not be prudent because less SIP amount will not fully fund your intended aim. ‘ Irregular monitoring Continually check the alignment of your SIP mutual fund investments with your long-term objectives. Your asset allocation might undergo a significant change. If you do not monitor your investments, it’ll be too late to sync with the changes. However, it must be kept in mind not to check them at short periods as it might lead to anxiety. Investing while having unrealistic goals Investing in a SIP mutual fund for a goal that cannot be fulfilled within a reasonable period is a typical error made by individuals. The SIP can achieve the aim depending on the income levels to support the plan by setting a good, achievable goal. For example, the investor desires to earn Rs.1.5 crore worth of cash within two years. Although this is possible, one should be able to afford the investment for the objective. Achieving this aim may be challenging if the person’s income is too low and they must use it to support their entire family. Prioritizing IDCW (Dividend) Plans over Growth Plans The marvellous effects of compounding are one of the ways that SIP mutual fund schemes aid investors in building wealth over time. However, if you do not reinvest the returns from the respective scheme, you will not fully benefit from compounding. Investors typically make this mistake when choosing an IDCW plan. This leads them to receive sporadic returns from the mutual fund scheme. As a result, the potency of compounding decreases. The same happens to the chance of maximizing your long-term profits. Appropriate Measures to be undertaken for avoiding the mistakes Now that you are well aware of the typical blunders which people make in the process, here are the ways you can avoid them if you decide to invest in a SIP mutual fund in the future: Set realistic goals as per the required time. Always choose the Growth Plan when you begin to invest in SIP. Monitor your SIP over fixed intervals of time. Invest in schemes that are steady, secure, and possess sufficient liquidity. Try using a SIP calculator to estimate the outcome and raise an appropriate SIP sum. Keep your investment time frame flexible to account for market volatility, and maintain patience through increments and decrements in the market. Increase the SIP amount while progressing in your professional life for more benefits in the long run. Seek the help of a financial advisor before investing. [B-02] Conclusion SIP mutual funds allow you to build up a scheduled technique so that your fund corpus accumulates consistently over time while ensuring that the total investment is regularized and disciplined. Set up a SIP with any amount you like when you begin investing on any day of your desired month. However, many investors make errors that ultimately work against their long-term benefits. It is crucial to avoid making these errors since they could have a negative influence on your financial planning and future goals. Always practice caution while investing and keep your objectives realistic. For further details, you can visit our website, piramalfinance.com. We will be more than pleased to answer your queries.
08-11-2023
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Home Loan

Why Should You Choose A Home Loan Balance Transfer?

Does your bank charge higher interest rates on your home loan than the other banks? Are you regretting your decision to choose that bank? Do you want to learn how you can lower your home loan interest rate? Then this article is for you! It can be as simple as transferring your loan to another bank. We will discuss home loan balance transfer and its benefits. Also, we will learn the points you should consider before opting for a home loan balance transfer. It will help you plan your investments accordingly. A home loan balance transfer is simply transferring your home loan from one bank to another to enjoy a lower interest rate in exchange for a one-time processing fee. However, the lower interest rate means that the total amount of interest paid over the loan's life is less, saving a lot of money. What is a home loan balance transfer? Let’s say you suddenly realise you are paying a massive amount of interest to your bank on your loan compared to the rates available at other banks. You ask your bank to reduce the rates, but your request gets denied. This is the ideal time to opt for a home loan balance transfer. When you opt for a home loan balance transfer, your new lender bank pays off the outstanding amount to the old lender. You now pay back your loan to the new lender in installments. But it will be at a much lower home loan balance transfer interest rate. When should you opt for a home loan balance transfer? Here is a list of certain scenarios in which you should consider getting a home loan balance transfer. Eligible for a lower-interest loan from another lender Home loan interest depends on many factors, including the Reserve Bank of India changing the interest rates, your credit profile, and other financial factors decided on by a lender. Home loan interest rates differ from bank to bank depending on these factors. Home loan borrowers might take this opportunity and opt for a home loan balance transfer to pay off the remaining loan at a lower interest rate. Improved credit profile Your credit profile is determined by your CRP, or credit risk premium, which the respective lenders use as criteria for setting the home loan interest rate. The CPR score improves when the credit score improves or when salary and job profile growth increase. If your credit score goes up this way, you can get a much lower interest rate on a home loan from another lender, making a home loan balance transfer the best choice. Huge outstanding loan amount When the loan amount is huge or most of it is yet to be paid, you can save a significant chunk of money by getting a home loan bank transfer because of the lower interest rates. Longer Loan Payment Tenure Although you will save money on interest regardless of how many years of loan payments remain, the longer the loan term remains, the more money on interest can be saved. Also, it is often seen that when the loan term is short, even if the borrower saves money on interest, the cost of transferring the loan will be more than the amount saved, so the borrower loses money overall. Change the type of interest rate A home loan can have a fixed or floating interest rate. The fixed interest rate will remain constant throughout the loan tenure, but the floating interest rate varies with changes in the repo rate set by the RBI. If home loan interest rates are possibly falling shortly, changing to a floating interest rate is the ideal option if you are doing otherwise. However, if interest is predicted to increase, opting for a fixed interest rate on a home loan is the best option. Thus, a home loan balance transfer is ideal in this condition where changing the type of interest ends in monetary benefits. Points to keep in mind when opting for a home loan balance transfer Fees and overall charges Individuals will opt for a home loan balance transfer to decrease their interest rate, ultimately saving some money in the process. But sometimes, the fee involved in the transfer exceeds the gains from the savings on interest money. A home loan balance transfer often includes additional expenses such as processing fees, stamp duty, home loan balance transfer fees, and many other additional charges. To remain in overall profit, consider the above expenses when considering a balance transfer. Foreclosure charges You need to check for the foreclosure charges imposed by the new lender. If the foreclosure charges are heavy, it will hurt your overall profitability. Timing of the transfer When the loan tenure ends in a few months or years, opting for a home loan balance transfer will only increase the expenses instead of reducing them. It is best to choose a balance transfer when more than half of the loan term is still left. Terms involved in the process Opting for a home loan balance transfer every time there is a reduction in interest rates is not necessarily an intelligent option. You should understand the terms of the transfer very clearly, and the overall profitability analysis of the entire process is a must. Different lenders might offer lucrative offers, but often, they will be attached with different underlying terms and conditions. You must understand them and only opt for the home loan balance transfer. [B-02] Final Thoughts A home loan balance transfer is an excellent option for saving money on interest as long as you understand the underlying costs involved and analyze the profitability of the entire process. To avail yourself of our services or learn more about home loans and other important financial concepts, visit the Piramal Finance website.
08-11-2023
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Home Loan

Uncover the Benefits of Home Loan EMI Calculator

With a rise in real estate market prices, buying a home is one of the biggest investments you may make in your life. Along with being a huge step, it is also a step that will not take a lot of time. However, it is an expensive buy. Usually, it may require you to get a home loan. After passing the eligibility criteria given by your lender and taking a home loan, you will have to pay interest and repay the principal amount in equated monthly instalments (EMI). Here is where the concept of home loan EMI calculators comes in. With a home loan EMI calculator, you can know about the EMI amount payable before you take a home loan. This will help you understand the loan amount and the loan tenure that will be suitable as per your income. To get through the entire home loan process and home loan tenure hassle-free, you can calculate your EMIs before taking a home loan using a home loan EMI calculator. [B-01] What Factors Influence Your Home Loan EMI Payments? Before using a home loan EMI calculator, here are a few factors to keep in mind while choosing a home loan of your choice: Your Income: One of the most important factors determining the amount of a loan you will be able to obtain, depending on the EMI you will be able to pay, is your income. Lenders take into account your income and try to give a loan that has EMI payments of less than a certain percentage, usually 40% to 50%, of your monthly income. Lenders like to make sure that you have a portion of your monthly income set aside for other expenses and savings. Type of Interest Rate: Home loans may come with attractive and low-interest rates, but you should still take a loan for the required amount only, not extra. Along with this, a floating or fixed interest rate will also determine your EMI payments. For example, a floating interest rate will have a low rate, causing low EMI payments in the beginning. However, later, with a rise in the rates based on the market situation, the EMI payments would increase. Your Expenses: When you consider the EMI payment as a portion of your income, consider the day-to-day expenses that you have to incur. Furthermore, future expenses like a child’s education, marriage, or vacation should also be kept in mind. Some funds for emergencies should also be maintained. For future expenses, the rising inflation also has to be noted. Home Loan EMI Calculators A home loan EMI calculator is a calculator specially designed to calculate the home loan EMIs that you will have to pay. It follows a specified formula that requires you to enter certain inputs. The home loan EMI calculators work on the formula given below: EMI = P x R x (1 + R)^N / [(1 + R)^N-1], where, P denotes the principal amount, that is, the original loan amount granted to you by your lender R stands for the rate of interest applicable to your home loan N denotes loan tenure every month. What Are The Perks Of Loan EMI Calculators? A home loan EMI calculator comes with certain benefits. Given below are some of them: The process is very easy. You just have to enter a few details like the loan amount, rate of interest, and tenure. It will help you compare different lenders based on the EMI and other fees, like processing fees. You can cross-check the repayment schedule that your lender provides. It results in better loan management. What Are the Benefits of Calculating EMIs Before Taking a Home Loan? Here is how you can benefit from calculating EMIs before taking a home loan, using a house loan EMI calculator: 1. You Can Decide the Amount You Need to Borrow If you calculate the EMI payments that you will have to pay, using a home loan EMI calculator, you can understand what loan amount fits your budget depending on your income. 2. You Can Make a Repayment Plan Well in Advance After you are done deciding the amount that you can borrow as per your budget and the applicable interest rates, you can start to plan the tenure that will help you reach that EMI amount. Make a list of the fixed expenses that you have to incur, and then plan out the loan tenure that will help you reach stress and hassle-free EMI repayment. 3. You Can Plan Prepayment If you know about your EMI payments using a home loan EMI calculator, you can make investments or save money accordingly so that your loan burden goes down. 4. Other Benefits You can check your affordability. You can compare different lenders and their interest rates to pick the best-suited one. You can decide more simply between a fixed and floating interest rate. Your home loan processing will be quicker as you can present the numbers to your lender, and they may just cross-verify. [B-02] The Bottom Line As an individual, you do not have only one expense to look after. As your family grows, the need for more expenses also goes up, along with the need for a bigger house. These needs subtly call for a home loan. The most important thing that we should consider while taking a home loan is the repayment burden that falls on us. For this, you should use a home loan EMI calculator. These calculators are designed in a way that helps you get accurate answers, and the best part is that these online calculators are free as well. So what are you waiting for? Calculate your home loan EMI in advance and apply for a home loan today at Piramal Finance. You can also visit our website to read more such blogs.
08-11-2023
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Banking

Why Should You Have A Nominee For Your Bank Account?

These days, having a bank account is important. Irrespective of whether you have a joint account or an account in your name only, what matters is having an account where you can deposit cash. It would be best if you did not keep your savings at home, as doing so involves several risks. Hence, it is best to put your savings in a bank, protecting you from theft. But what happens to the money in the event of your death? This is why it is important to have a nominee for bank account. Life is uncertain, and you can never be sure about the future. As such, you must be prepared to handle any uncertain outcomes. Your bank account holds the money you have saved over a period of time. Thus, you will not want it to fall into the wrong hands. This is why all banks offer the option of naming a bank nominee. Read on to learn more about what is nominee for a bank account is and why you must have one. [B-01] What is Nominee for Bank Account? When you open a new bank account, you can name a bank nominee. A nominee for bank account is the individual who will, upon your death, receive the funds in your bank account. The person you have named as a bank nominee has all the rights to the money in your account without the need for a court order. If you do not name a nominee for your account, the bank will place a lien on the money until someone gets a court order or succession letter and submits it to the bank. If you did not add a nominee for bank account at the time of account opening, you can do it later. The process is simple and takes only a few minutes. No additional documentation is required for this process. Here are some key aspects regarding a bank nominee: Your bank nominee can be your spouse, mother, father, child, or sibling. Most banks now insist on adding a nominee for bank account and lockers. Hence, you must name a person you can trust with your money and assets. You can cancel a nomination or add a new nominee as you wish. If you are naming a minor as your bank nominee, you must also give the legal guardian’s details. As this person will have the money till the minor is of age, so choose wisely. You can only name one nominee for one bank account. But you can name separate bank nominees for different bank accounts and lockers. The bank nominee will get the money only in the event of your death. How to Add a Nominee for Bank Account If you have not named a nominee for bank account, you must do so as soon as possible. This will save you from a lot of problems later on. To add a bank nominee, follow the steps below: Offline Visit the base branch of your bank, i.e., where you first opened the account, as they will have all your documents. Reach out to the manager and put your request in writing. The manager may ask for a valid ID proof to verify your identity. So, make sure you carry an ID proof like an Aadhar, voter ID, or passport. The manager will give you Form DA1. This is the form to add a new bank nominee. Fill out the form and ensure all the details are correct. Sign the form and submit it to the manager. You may also need to give a self-attested copy of your valid ID proof. It will take a few days for the bank to add the nominee for bank account. If you want to cancel a nominee, you will have to fill out the form DA2. If you want to change the bank nominee, form DA3 is required. The remaining process will remain the same. Online You can also add a bank nominee online. To do so, ensure that you have internet banking enabled on your bank account. Log on to your net banking account. Here, you will have to select the “Account Update” or “Profile Update” option. Now you can see the link for “Add a nominee” if you have not named any yet. Click on this link. Now, you can enter the name of the person you want to name as the nominee. You will also have to specify the relationship you have with that person. Check the details once again, and then click on the submit button. You will need to enter an OTP that has been sent to your mobile number to verify the request. You will get a reference number on your phone with the details of the update request. The process will take a few days, and the nominee’s name will appear in your bank account details. [B-02] You can also cancel a nomination or change a nominee using the same steps. You can follow the offline process if your net banking does not show this option. To ensure that your money and assets are in the hands of the right person, make sure you name a nominee for bank account soon. This is a very useful financial tip that will help you in the future.
08-11-2023
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Home Loan

Everything You Need To Know About RBI Guidelines for Home Loan Balance Transfer In 2022

The real estate space has seen a sharp surge in recent years as every family dreams of owning at least one property in a location of their choice. Additionally, due to various government initiatives, people have realised the importance of owning a house. As we all know, many people aspire to own their dream house but fully financing it becomes a challenge. Therefore, in such cases, they opt for home loans. Additionally, with an increase in the number of people buying houses, there has been a huge rise in home loan applications. Various financial institutions provide home loans. These institutions are both public and private. Furthermore, various Non-Banking Financial Institutions (NBFCs) offer a wide range of home loan products. The banks’ home loan products are subject to specific legislation and regulations that the Reserve Bank of India (RBI) implies. However, as the RBI does not regulate NBFCs, and these institutions provide home loans from their capital; therefore, there is no interference from the regulator. [B-01] Now that we have understood the functions of the two categories of home loan lenders, let’s dive into which type is best-suited basis key factors such as interest rates, loan eligibility, processing time or turnaround time, and so on. In the case of a bank, the Repo rate determines the interest rates. However, in the case of an NFBC, the interest rates are determined by prevailing market rates. Additionally, unlike banks, the NBFCs provide you with various benefits and options such as flexible terms & conditions, higher home loan eligibility and approvals even in cases of low credit scores, a faster processing time, quick disbursement, and less documentation, among others. The RBI has recently come out with guidelines for home loan balance transfers. These guidelines indicate that you can transfer your home loan balances to maximise your loan affordability with better terms of service. The guidelines state that banks and money lending companies cannot charge home loan fees to transfer the balance. How does a Home Loan Balance Transfer work? To transfer your home loan balance, you must first foreclose the current home loan and take a new home loan for the due principal amount. You can apply for a new home loan with the charges waived off on foreclosure of floating interest rates. However, a few banks may charge a pre-payment penalty ranging from 1% to 3% on fixed-rate loans. A home loan balance transfer can be a viable and feasible option if you get better loan terms and a lower interest rate. However, before transferring your loan, consider all the factors and make an informed decision. Factors to consider before opting for a home loan balance transfer Below are the factors that you must consider and carefully weigh your options before opting for a home loan balance transfer: Workout overall savings While opting for a home loan balance transfer, you should always consider all the additional costs levied by your current lender for closing the existing loan before the tenure. You should also consider the processing fee charged by the new lender. In general, you must always consider your overall savings; if transferring your loan enables you to save more, you should opt for it. Ease of processing and documentation When applying for any loan, processing and documentation may become tiring. Therefore, it is prudent that you go for a lender who provides a hassle-free experience with minimal documentation. Analysing the remaining tenure of an existing home loan It is also important to note that if you opt for a loan balance transfer in the later stages of your tenure, it may prove less beneficial since a huge chunk of the interest is paid in the initial stages of a loan. Therefore, it will leave very little room for overall savings. Moreover, you must also duly consider additional costs associated with the transfer, such as processing fees, foreclosure charges, EMI bounce charges, penal interest rates, convenience charges and so on. All these factors will help you make an informed decision about your transfer. There are various benefits of home loan balance transfer that you can enjoy once you analyse the factors mentioned above. Here are some of the benefits and advantages of opting for this facility: Lower rate of interest Getting a low-interest rate will help you save on the overall cost of the loan, which is one of the essential benefits of transferring your balance loan to another lender. Flexibility in repayment tenure You can also enjoy the flexibility of repaying your loan per your financial capabilities. Payment options Payment options like part-payments allow you to repay a portion of the outstanding loan principal. These options also help you reduce your loan amount or the monthly EMIs. Top-up loan options Top-up loan options allow you to get additional funds to buy a new property or renovate an existing property. Lenders these days also provide you with competitive rates on ongoing housing loans. What are the Documents Required to apply for a home loan balance transfer? Here’s a list of documents that you will need to submit to the lender for the transferring the balance: Bank Account Statements Address Proofs (Aadhar card & PAN Card) Other KYC documents demanded by the lender Photographs Additionally, if you are self-employed, you must submit a properly audited profit & loss statement to the lender. [B-02] Conclusion If you are unhappy with the terms offered by your current lender, you can opt for a balance transfer. However, before deciding, you should always consider the earlier mentioned points, which will help you make an informed decision based on your financial capabilities and goals. Paying your EMIs on time is also important, as it will ensure that you maintain your credit score and enjoy a hassle-free borrowing experience. Get in touch with Piramal Finance for more information.
08-11-2023
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Business Loan

Benefits of Taking a Business Loan with Piramal Finance

To start a business and keep it going, you need money. You shouldn’t let a lack of money stop you from starting a business or growing the one you already have. A business loan is a one-time solution that will make sure your business doesn’t have any financial problems. Business loans are money that banks and other financial institutions give to businesses so they can meet their everyday needs. There are many reasons to get a business loan, and these loans can help you out if you’re having trouble getting money. You can get your plans right with the help of a business loan from Piramal Finance. Let’s look at the benefits of taking a business loan from Piramal Finance. [B-01] Key Benefits of Taking a Personal Loan from Piramal Finance Here are some benefits of taking a business loan with Piramal Finance: Different kinds of collateral are accepted When you apply for a business loan, you can choose to use collateral if you want to. Piramal Finance knows that businesses need money, so it will accept a wide range of things as collateral for a secured business loan. Easy and quick approvals Today, getting a business loan online is much easier than it was in the past. Piramal Finance knows that your time is valuable, so it follows the rule that loans should be approved and paid out quickly and without any trouble. More money to borrow Piramal Finance offers business loans with high amounts, up to INR 25 lakhs, to help all kinds of businesses meet their needs. Personalized Solutions Piramal Finance has a team of relationship managers who help people who want to get a loan at every step. Their products are made with the customer’s needs in mind. Low rates of interest Piramal Finance gives business loans to both salaried and self-employed people at an interest rate of 12.5%. Reasons Why You Should Take Out A Business Loan Getting a loan for business financing can be a good idea. With the extra money, you can buy new products or hire more people. This will help your business make more money and grow. Let’s look at why you might want to take out a business loan: Starting a New Business Before a business can take its first step, there are a lot of things that need to be done and things that need to be set up. To pay for all of these, capital is essential, and a business loan can make it easier on the owners. For business growth If a business is doing well and the owners want to grow it, a business loan would be very helpful. It can be used to pay for the creation of new products, hiring, promotion, marketing, and many other things. For Renovations It is very important to always update your office space so that you can get more customers. Getting a business loan is the best thing to do if you want to fix up the place and add new, high-tech equipment. To get new business opportunities If you want to take advantage of a business opportunity on the market, you might need money. Business loans can help you get money no matter where or when you need it. To stand out from your competitors Today, there is competition in every field, so it is important to stay ahead of your rivals. By using a business loan, you can do things like, install high-tech machines, digitise your business, switch to better software, etc. General rules to follow after taking out a business loan Here are a few general rules you need to follow after you take out a business loan: Before getting the money, make a 6-month financial forecast. You should make a plan for how your business will do financially. This will help you keep track of your spending and earnings for another six months. By doing this, you’ll also be able to change your budget if you need to. You might also find it helpful to make a budget for yourself. Make sure you have enough money to make the payments. You need to be sure you can make the loan payments on time. To do this, you must keep records of how much your business costs and how much it makes. This will help you figure out how much money you’ll have each month to pay back your loan. If you don’t know whether you can make payments, it’s best to talk to a financial advisor. Also, if the interest rates on the type of loan are lower, it will be much easier for you to pay back the money. Don’t borrow more than you can afford. It’s important to only borrow as much money as you need. If you borrow more than you need, it could put unnecessary stress on your finances. You should only borrow money if you are sure you can pay it back. Never use a business loan to pay off personal debt. This is the biggest error that new investors make. It can be tempting to use money from your business to pay for personal expenses, but this is a bad idea. Not only will it hurt your business, but it could also land you in legal trouble. Try not to take a business loan to pay for things you want for yourself. Business owners usually take loans for personal expenses. It might be tempting to purchase a car or go on a vacation with the extra money, but don’t do it! Don’t forget that a business loan is only used for business-related costs. If you don’t, you could hurt your business if you can’t pay back the loan. If you’re not sure if an expense is related to your business, ask yourself if it will help you make money. If the answer is no, it probably isn’t worth including on your application for a business loan. [B-02] Conclusion For many business owners, getting a business loan is the best way to make sure that their business can continue operating or even grow. A business loan can give you the money you need to keep your business going or help it grow. It can also be used for several other things. Before deciding on a loan, you should think about all of your possibilities and compare rates. For similar blogs like this, you can visit Piramal Finance and explore their products and services.
08-11-2023
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Schemes

Withdrawal Rules To Know For NPS

You need to save and invest your money to lead a good life even after you retire. It does not matter if you are in business or service; you must opt for NPS. The NPS, or National Pension Scheme, is a long-term savings option that will mature after you retire from work or attain 60 years of age. NPS operates under the Government of India and the PFRDA. If you want to invest in NPS or are already investing, you must know that you can withdraw your NPS corpus as an annuity or lump sum. But if there is an urgent need, you can opt for partial withdrawal, subject to some rules. Read on to learn more about the NPS pension scheme and how to withdraw your money. [B-01] How to withdraw money from the NPS? In the normal course, you can opt to get your NPS corpus as a lump sum or as an annuity after you retire from work, i.e., when you are 60. You can also draw money from the National Pension Scheme before you retire if there is an urgent need. But this option is subject to the rules of the PFRDA in terms of age, corpus amount, time, and other factors. You can draw money through online or offline methods, as you prefer. Here are some key rules related to this process: After you retire, you can draw 60% of your NPS corpus as a lump sum, while the other 40% must be used to purchase an annuity. You can extend the NPS scheme until you reach 70 if you do not want a lump-sum withdrawal. If your entire NPS corpus is not more than Rs 2 lakh, you can get the entire amount as a lump sum. If you work with a government and opt for VRS, you must use not less than 80% of the NPS corpus to purchase annuities. You can get the entire amount if the corpus is below Rs. 1 lakh. In the event of your death before the given age, your legal heir or nominee will get the entire NPS corpus. Partial withdrawal is possible only after three years of starting your NPS account. Partial Withdrawal from NPS You can get some money from your NPS corpus, per the present rules. If you are in urgent need of cash, you can make a partial withdrawal that is tax-free. You must apply with PFRDA online or through your POP service provider. This facility comes with some very strict rules, such as: The amount must be less than 25% of the money you have put into the scheme. Your NPS account must be more than three years old. This facility is available for some urgent needs, like Further education of your child. Your child’s marriage Paying for your first house (by yourself or with a spouse). Urgent health treatment for cancer or organ transplant. Serious accident that has a life-threatening risk. Other ailments, as stated by the PFRDA. You can make three partial withdrawals during the entire tenure of the NPS. There must also be a gap of at least five years between each such withdrawal. NPS Withdrawal After Retirement Here are the key rules you must note if you want to wait until the time you retire to withdraw money from the National Pension Scheme: When you reach the age of 60, you can withdraw the entire corpus. You will get 60% as a lump sum out of the entire amount in NPS, while the other 40% must be used to get an annuity. Here, the lump-sum amount will be tax-free, but the annuity will be subject to income tax rules. You will have to pay tax on it per the present IT rules. If the entire corpus is less than Rs. 5 lakh, there is no need to get an annuity plan. You can opt for a lump sum that will be tax-free. If you do not want to close your NPS account when you retire, you can extend it until you are 70. NPS Withdrawal After Voluntary Retirement If you work for the government and want to take VRS before the given age as per NPS, you can opt out of NPS. However, some restrictions will apply, such as: Your NPS account must be at least 10 years old if you want to draw money before you reach the age to retire. If your total corpus is not more than Rs. 2.5 lakhs and if you opt out of NPS due to VRS, you can get the entire amount as a lump sum. If your National Pension Scheme corpus is more than Rs. 2.5 lakhs, then you will only get 20% of the amount as a lump sum, and with the balance of 80%, you must get an annuity plan. This withdrawal will be subject to taxation as per the IT rules at that time. [B-02] NPS Withdrawal After Death There are various rules you must note regarding NPS withdrawal in case you die before reaching the age of 60. If you work in the private sector, your legal heir or nominee will get the entire NPS corpus as a lump sum. Your legal heir or nominee must get an annuity plan if you work for a government body. No lump-sum withdrawal will be offered. The National Pension Scheme is a good option for you to plan your life after you retire from work. If you want to explore other options, then visit Piramal Finance. Their experts have shared good advice through blogs and articles to help you make an informed decision. This will help you plan for a good life after retirement.
08-11-2023
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